Venture capital investments at six year high

Last week, we wrote venture capitalists are investing at their fastest pace in years, citing anecdotal evidence.

Some data just published confirms this: Venture capitalists invested more in the second quarter than they have in six years, according to a survey by Ernst & Young and VentureOne.

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VCs pumped $7.4 billion into companies during the quarter, eight percent more than the same period last year. The number deals also rose eight percent, totaling 717 deals, also the highest deal volume since 2001.

They’re being driven in part by an opening in the IPO market, and continued vibrancy in mergers and acquisitions — in both medical devices and in other high-technology sectors.

See tables below for the breakdowns of investments by market sectors and regions.

The VC growth is remarkably steady. This marks the ninth straight fiscal quarter of year-over-year growth in venture capital invested.

Investments in information technology were up ten percent compared the period a year before, with $4.1 billion invested. In life sciences, however, investments in biopharmaceuticals were down to $1.099 billion from 1.355 billion the same quarter the year before.

Medical device investments skyrocketed to $1 billion in 75 deals, the highest totals on record and 58 percent more than the second quarter of 2006. Excitement here stems from IPOs by companies such as stent-maker Xtent and acquisitions such as Boston Scientific’s purchase of Remon Medical Technologies.

Finally, the report also confirmed a trend of larger deal sizes and more money going toward later-stage investments. The median deal size in the second quarter of 2007 reached $8 million, up from the $7.4 million seen during the same time last year and the highest median seen since 2000.

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